Germany is to insist that new financial rules are implemented to prevent the financial crisis from being repeated, Chancellor Angela Merkel said Thursday, adding that governments must aim for exit strategies from their fiscal policies.
"We will make sure, and I think there is a broad consensus here, that we will get a new financial constitution for the international markets in order to prevent a repeat of the crisis," she told the lower house of parliament with reference to next week's Group of Eight industrialized nations' summit.
She also criticized some banks for seeming reluctant to accept a new financial constitution. Merkel said governments must prepare an exit strategy once the global economy has recovered. Germany has repeatedly called for such exit strategies given ballooning deficit levels.
"The high risks taken in order to boost non-sustainable growth have been the cause of this crisis. And it is now right that we fight this crisis, and this will continue for quite some time," Merkel said. She added it is important to agree on ways of striving for sustainable growth "once we have reached an economic activity level such as for instance prior to the crisis, such as in 2007 or 2008."
Germany is "by far and wide the only country which has committed itself" to a sustainable growth path by the middle of the next decade, Merkel said, referring to the implementation of a debt brake that would force the country to eventually do without new debt.
She also said the G8 format as it stands won't be sufficient for dealing with international issues any more.
"We can see that the world is growing together," Merkel said. "Those problems we are facing can no longer be solved by the industrial countries alone."
The G8 will meet with emerging economy countries Brazil, China, India, Mexico and South Africa, as well as Russia and African nations.
She said it is important to fight any tendency toward protectionist measures.
"There are here and there some clauses, such as Buy American or Buy Chinese, which harbor the risk," Merkel said. "We must be very vigilant here."
The recent Group of 20 leading nations summits in Washington and London have been "important steps" toward a reform of global financial rules but it's now important "to implement these measures," she added.
Merkel also said that the next G20 meeting in Pittsburgh in September should lay the groundwork for a charter of sustainable economic policy.
New regulation must ensure that criteria applied to banks "must not be different but the same, in order to create a reasonable fair level playing field," Merkel said.
In her speech, she also lauded the new U.S. government's climate policy as a change in trend, adding there is reason to hope to "perhaps get to results" at the December climate summit in Copenhagen.
The U.S. policy measures "are not yet automatically bringing us to the 2050 target and it will be important that the L'Aquila communique will include a clear commitment to (reduce the global warming) to 2 degrees."
The U.S. House of Representatives last month adopted a bill to combat climate change, anticipating a 17% reduction in greenhouse gas emissions by 2020 compared with 2005, and 83% by mid-century.
G8 leaders from Canada, France, Germany, Italy, Japan, Russia, the U.K. and the U.S. are meeting July 8-10 in L'Aquila.